Based on what I understand, the amount of traffic headed to 1.1.1.1 is much more significant. I agree with you though, that wouldn’t be justification to block it. It looks like they’re also blocking 1.0.0.1 and the relevant ipv6 addresses which shouldn’t have the same traffic issue.
I doubt it's all that significant, it's a really small portion of traffic compared to a web page, javascript, css or images... and with caching even less of an impact.
The problem isn’t DNS traffic. The problem is that for years people have been using 1.1.1.1 in the configuration of software and devices when they didn’t have an up address to configure. The result is that when 1.1.1.1 becomes routable all that additional traffic flows there and AT&T along with other provides carries that traffic. I was wrong that AT&T was blocking it for honorable reasons but this is a still a significant amount of traffic.